New Media Meets the Auto Industry

Facebook, Google and Microsoft Xbox are changing the way we buy cars — and how businesses interact with their customers in general.

When it comes to how businesses and their clients interact, the rules of engagement are changing — even as I write this. Yesterday, Facebook announced its new “graph search” tool, which lets users search for recommendations through their friend network and essentially brings social media, search and marketing closer than ever before.

This announcement is a continuation of my enlightenment that started a month and a half before, at the Western Automotive Conference, a day-long window into the future of the automotive industry. The event was sponsored by JD Power & Associates and held in conjunction with the LA Auto Show.

Yes, this is a blog about fleets and the automotive industry, but this new interaction has everything to do with how cars are sold and how businesses reading this blog can better serve (and extract more money from) their customers.

One of the forums at the conference featured young and articulate representatives from Facebook, Google and Microsoft’s Xbox, as well as a (not so young, but articulate) dealer principal.

The topline message: The communication device is evolving along with the way to communicate, while collecting actionable data, parsing it and measuring specific results are imperatives.

First, online interaction now happens primarily on the go, as the amount of time spent on mobile devices is becoming greater than on a desktop. There was a 100% increase in mobile platform purchases on Black Friday last year. Google saw double-digit growth last year in searches on mobile devices while queries tripled on tablets. Facebook users on mobile devices have nearly doubled in a year. In 2012, Facebook’s advertising revenue from mobile was 14%, up from nothing the previous year.

At LAcarGUY, a multi-franchise dealership in metro Los Angeles, mobile now constitutes 25% of its internet activity. “[A car dealership] writing for mobile devices wasn’t even a thought four years ago,” said Mike Sullivan, owner and founder.

This has changed the very core of how customers approach Sullivan’s dealership. “The idea of walk-in traffic expired years ago,” he said. “They know more about me now from the get-go than they ever did before. The engagement has flip-flopped. Twenty years ago they’d come in with the paperwork telling me what they’re going to pay. Now, they don’t even have to engage me at all [and still buy a car].”

While the first step is to connect, the next is to engage with users in a compelling way and then extend the marketing message through the influence they have with their friends.

Sullivan recounted a campaign called Throwback Thursday, in which, for instance, the dealership posted on its Facebook page photos of an old Subaru Brat. The results: 314,000 people saw it, 4,700 liked it, 102 talked about it and 54 interacted with the dealership as a result, Sullivan said.

Sullivan works cross promotions across all his platforms, such as a recent charitable environmental campaign that was leveraged across Facebook, Twitter, YouTube and his blog. The idea is to “force feed customers to engage on more mediums” while being able to “brag humbly” about the message. Then, “hopefully they will share it,” said Sullivan, who boasts 2,700 Twitter followers and 1,600 fans on Facebook.

Online gaming presents new opportunities for marketing because “the level of engagement of a game is so much more than active than TV watching,” said Randy Shaffer of Microsoft, which results in a higher level of engagement with a marketing message. Ironically, the Microsoft Xbox gaming console is now used more for video consumption than gaming, and is now “the biggest television network in the world,” according to Shaffer.

In the new social medium, it’s about allowing the advertiser to participate with you.

Sullivan gave an example of a Facebook user who posted a comment that she had a 1999 Subaru Forester “on its last legs” and wanted a deal on a certified pre-owned Forester. Sullivan said that this forum allowed the dealership to engage with her in a personal, conversational way, with the dealer as the invited guest — and then sold her a car.

And finally, it’s about measurement: Google’s new Active View product indicates not only if the message was served, but if it was actually viewed — essentially only charging advertisers when consumers engage with the brand. “Everything is tied to measurement, which is what our advertisers really want,” Morris says.

On social media platforms, marketers get a true representation of the user, with not only basic demographics but also hobbies and interests — which mean they can better understand how to reach them. By logging in to Xbox, you’re showing your profile to advertisers, while your experiences are being gathered by the device. Microsoft has 150 behavioral targeting segments, and the No. 1 segment is auto researchers, Shaffer said.

A deep dive into measurement allows marketers to hone the message. Southeast Toyota did a brilliant job in leveraging this with a campaign on Xbox for the Toyota Yaris, in which it was able to target niches such as “self-identified males in Southern California ages 18-34.”

This type of “geo-targeting” can not only be used to make sure the message is locally relevant, but it can be customized to specific device owners such as iPhone or Android, and was used for the launch of the Samsung Galaxy II. In the recent elections, candidates were able to “microcast” to thousands based on precinct.

Banner ads are so “two thousand and late,” to quote a Black Eyed Peas song. “I just don’t go and buy an online ad,” Sullivan said. “If I can’t be part of the community or part of the fabric I don’t want to do it.”

Sullivan said that many of his competitors are still resistant to the power of the Internet. But the upside is tremendous, and it’s all about the end results: “We make friends with them before they come in,” he said, noting that his dealership group is upping closing ratios from 20% to 50%.

While your business might not yet be optimized for mobile, you can bet your customers are. And while you might not yet be on the social media train, your customers’ data is out there. It’s time to start harvesting it.